On July 30, HM Treasury announced the terms of the review which will be conducted by Martin Wheatley, the CEO-designate of the Financial Conduct Authority, examining the framework for the setting of LIBOR.
The Wheatley review will formulate policy recommendations with a view to reforming the current framework for setting and governing LIBOR, including consideration of:
- Whether participation in the setting of LIBOR should become a regulated activity under UK financial services legislation and regulations;
- How LIBOR is constructed, including the feasibility of using actual trade data to set the benchmark;
- The appropriate governance structure for LIBOR;
- The potential for alternative rate-setting processes;
- The financial stability consequences of a move to a new regime and how a transition could be appropriately managed;
- Determining the adequacy and scope of sanctions to appropriately tackle LIBOR abuse;
- The scope of UK regulatory and criminal authorities’ powers with respect to financial misconduct, particularly market abuse and abuse relating to the setting of LIBOR and equivalent rate-setting processes; and
- The FSA’s approved persons regime and investigations into market misconduct.
A formal discussion paper covering the above points will be published on August 10 and the review will aim to publish its conclusions by the end of September.
For more information, click here.